WEEKLY SOYBEAN REVIEW: Soybeans Try to Assert Strong Fundamentals

While soybeans often seemed joined at the hip with the stock market this fall, signs of a little stabilization on Wall Street didn't do beans much good last week. Instead, futures went back to following crude oil for direction, and that guidance was relentlessly negative.

While weak demand is fundamental culprit behind the drop in crude, that rationale doesn't apply to beans. True, exports were down last week, but that may have been more about turkeys than bears. Weak oil markets are pressuring domestic crush, but as long as China keeps buying, overall bean demand looks good.

Supportive news also came out of South America. Buyers remain reluctant to take beans out of Argentina, after political problems there that likely won't be eased by the global financial crisis. It's also turning dry in both Argentina and southern Brazil, where producers also are seeing a financial squeeze. So far, nothing indicates a disaster, but record production may be less likely.